Market Overview

Despite Recent Rally, Kinder Morgan Analyst Sees Outperformance Ahead

Share:
Despite Recent Rally, Kinder Morgan Analyst Sees Outperformance Ahead

Kinder Morgan Inc (NYSE: KMI) reported broadly in-line results first-quarter results Wednesday.

Although the oil pipeline operator's stock has appreciated 28 percent year-to-date, it will continue to attract investor attention, as investors focus on the importance of returns over growth and the company is able to highlight its financial flexibility, according to Raymond James.

The Analyst

Justin Jenkins maintains an Outperform rating on Kinder Morgan with an unchanged $21 price target.

The Thesis

Kinder Morgan reported first-quarter adjusted EBITDA of $1.947 billion, largely in-line with the Street estimate. The segment results were also mainly as expected, Jenkins said in a Thursday note. (See his track record here.) 

The company reported quarterly discounted cash flow of $1.371 billion, beating the Street estimates of $1.247 billion on the back of lower maintenance capex.

Kinder Morgan’s strategic review process of its Canadian subsidiary Kinder Morgan Canada (KML) is still underway. Jenkins said management has three options: to run the subsidiary as a standalone business, sell it or decide on a strategic combination with another company.

The energy infrastructure company said the Canadian business represented only around 2 percent of its EBITDA in what the analyst said is “perhaps a subtle way to keep market expectations on possible KML proceeds in check." 

Raymond James expects the stock to outperform over the next 12-18 months, with continued dividend growth, share buybacks and cash flow stability/growth into 2020.

Price Action

Kinder Morgan shares were down 2.49 percent at $19.19 at the time of publication Thursday. 

Related Links: 

Earnings Scheduled For April 17, 2019

Insider Buys Of The Week: Abeona Therapeutics, Kinder Morgan, Landec

Latest Ratings for KMI

DateFirmActionFromTo
Aug 2020StifelMaintainsBuy
Jul 2020Goldman SachsDowngradesNeutralSell
Jun 2020Morgan StanleyMaintainsEqual-Weight

View More Analyst Ratings for KMI
View the Latest Analyst Ratings

 

Related Articles (KMI)

View Comments and Join the Discussion!

Posted-In: Justin Jenkins Natural GasAnalyst Color Earnings News Price Target Reiteration Analyst Ratings Best of Benzinga

Latest Ratings

StockFirmActionPT
KEYSGoldman SachsUpgrades120.0
GTBIFNeedhamMaintains21.5
OXYJP MorganUpgrades
MUDeutsche BankDowngrades48.0
ELANCredit SuisseReinstates27.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com